Vancouver finally feeling the pain of foreign home buyers’ tax

Vancouver finally feeling the pain of foreign home buyers’ tax

Roughly half a year after the provincial government’s implementation of a property transfer tax on foreign home buyers, a noticeable slowdown in sales volume and home price growth has taken hold of the once-dominating Vancouver housing market.

In its latest report, the Real Estate Board of Greater Vancouver revealed that sales numbers stood at 1,523 sales in January 2017, a sharp decline from 2,519 during the same time last year. Last month’s numbers—which were 10.3 per cent below Vancouver’s 10-year average for January—represented an 11.1-per-cent decrease from December’s 1,714 deals.

Sales volume in the detached property segment—once deemed the deciding factor in overseas nationals’ decisions to purchase in Vancouver—saw a more dramatic 57.6 per cent year-over-year drop, with only 444 completed transactions.

“From a real estate perspective, it’s a lukewarm start to the year compared to 2016,” Board president Dan Morrison stated, as quoted by the Financial Post.

“While we saw near record-breaking sales at this time last year, home buyers and sellers are more reluctant to engage so far in 2017.”

Home prices have similarly slackened, with Metro Vancouver’s composite benchmark price (across all housing types, and using data culled from MLS transactions) as of last month falling by 3.7 per cent in the past half year, down to $896,000. The city’s detached properties are currently going for an average of $1,474,800, declining by 6.6 per cent in the past 6 months.

As a result, supply has seen a conspicuous increase recently, with the total number of listings in Metro Vancouver’s MLS rising by 9.1 per cent year-over-year last month to 7,238. New listings for detached, attached, and apartment properties in Metro Vancouver sat at 4,140 in January, a 6.8 per cent decline from a year ago but a sharp 215.5-per-cent upward spike from December 2016.